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Size and Age as Determinants of Employment Growth among Manufacturing Firms in Pakistan

Author

Listed:
  • Farrukh Iqbal

    (Center for Social Policy Research, Karachi.)

  • Aadil Nakhoda

    (Institute of Business Administration, Karachi.)

Abstract

Size-based industrial policy (support for small firms) has long been provided by the government in Pakistan while age-based policy (support for young firms) has become prominent in recent years. Both policies are typically justified by reference to positive effects on labour absorption. Despite their popularity among policymakers, however, the empirical basis for such policies has not been adequately analysed at the national level. We address this issue using data from a large, multisector, random sample of manufacturing firms and find empirical support for size-based policies but not for age-based ones. We also find that sizebased policies appear most relevant for firms with less than fifty workers.

Suggested Citation

  • Farrukh Iqbal & Aadil Nakhoda, 2021. "Size and Age as Determinants of Employment Growth among Manufacturing Firms in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 60(2), pages 119-132.
    • Handle: RePEc:pid:journl:v:60:y:2021:i:2:p:119-132
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    More about this item

    Keywords

    Firm Size; Firm Age; Employment Growth; Manufacturing; Pakistan; Industrial Policy;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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